(a)

Attorney's Note

Under the Tennessee Code, punishments for crimes depend on the classification. In the case of this section:
ClassPrisonFine
class E felony1 to 6 yearsup to $3,000
For details, see Tenn. Code § 40-35-111
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Terms Used In Tennessee Code 12-4-103

  • Contract: A legal written agreement that becomes binding when signed.
  • Conviction: A judgement of guilt against a criminal defendant.
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • State: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Tennessee Code 1-3-105
(1) It is hereby declared unlawful for any state official or employee to bid on, sell, or offer for sale, any merchandise, equipment or material, or similar commodity, to the state of Tennessee during the tenure of such official’s or employee’s office or employment, or for six (6) months thereafter, or to have any interest in the selling of the same to the state.
(2)

(A) Except as otherwise provided in this subdivision (a)(2), it is an offense for any member of the general assembly to bid on, sell, or offer for sale any service to a state entity or to have a financial interest in the bidding, selling, or offering for sale of any service to a state entity. The prohibition set out in this subdivision (a)(2)(A) applies during the tenure of the member’s office and for six (6) months thereafter.
(B) It is an exception to the application of subdivision (a)(2)(A) if:

(i) A member of the general assembly was elected prior to July 1, 2021;
(ii) The member provided or offered to provide the service to a state entity prior to July 1, 2021, and the service is being provided or offered to the same state entity;
(iii) The member has held office as a member of the general assembly continuously since July 1, 2021; and
(iv) The member disclosed the nature of the service and the name of the state entity to which the service is provided or offered on the member’s statement of interest pursuant to § 8-50-502 no later than September 1, 2021, and annually thereafter, for all years in which the member has continuously served as a member of the general assembly.
(C) It is an exception to the application of subdivision (a)(2)(A) if the service is provided through an employment contract, an indigent defense contract, or a medical services contract unless prohibited by the Constitution of Tennessee.
(D) It is an exception to the application of subdivision (a)(2)(A) if the financial interest in the bidding, selling, or offering for sale of any service to a state entity is:

(i) Held in a blind trust pursuant to § 35-50-120 prior to administration of the member’s oath of office, during the tenure of such member’s service as a member of the general assembly, and for at least six (6) months thereafter; and
(ii) Disclosed in accordance with § 2-10-128(a)(3).
(E) It is an exception to the application of subdivision (a)(2)(A) if the financial interest in the bidding, selling, or offering for sale of any service to a state entity is:

(i)

(a) Held as an investment with a federally chartered bank or state chartered bank;
(b) Held as a share in a mutual fund; or
(c) Held as a security in a business enterprise listed on the New York Stock Exchange, the NYSE American, or the Nasdaq and the holding represents less than five percent (5%) of the outstanding securities of the business enterprise; and
(ii) Disclosed pursuant to § 2-10-128 or § 8-50-502, as applicable.
(F) The exceptions provided in subdivisions (a)(2)(B)-(E) do not apply to services provided to the legislative branch of state government. This subdivision (a)(2) does not preclude either house of the general assembly from adopting a rule more restrictive than the prohibition set out in subdivision (a)(2)(A).
(G) For purposes of this subdivision (a)(2):

(i) “Compensation” means any salary, fee, payment, reimbursement, or other valuable consideration, or any combination thereof;
(ii) “Service” means any work, labor, or assistance provided in exchange for compensation; and
(iii) “State entity” means an agency, branch, bureau, commission, department, or division of this state, and does not include a local government.
(b) A person violating subsection (a) shall be liable to the state for any and all sums paid out by the state, together with interest at the rate of eight percent (8%) per annum, growing out of any such transaction.
(c) A violation of subsection (a) is a Class E felony.
(d)

(1) A person who is convicted under subdivision (a)(2) is forever afterwards disqualified from holding any office under the laws or constitution of this state.
(2) If at the time of conviction for an offense specified in subdivision (a)(2), the person still holds an office under the constitution of this state, then this subsection (d) applies to such person at the end of the person’s term of office, unless otherwise expelled from office prior to that time.
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